Is electoral handouts necessarily the best option?

This unpublished article was written some time ago.

Photo courtesy of hingus2000

They are officially known as New Singapore Shares or Progress Package, but is cynically known to some as electoral handouts. In terms of the total sum, each is well over the excess of $2 billion.

Some speculate that such are given out to achieve a temporary narcotic effect that will entice voters to vote for the ruling party. The more discerning ones will be questioning if it is a case of unloading some money from the government’s left pockets only to return more money to its right pockets. They can point to the fact that the Good Services Tax (GST) was raised from 5% to 7% in July 2007, one year after the General Elections in 2006.

However, voters weren’t able to know of later developments to increase the government’s coffers at that point of time during the elections. At least, the fact that the government can afford to distribute handouts in excess of $2 billion gives an apparent impression that its fiscal management methods are sound. However, whether or not such is for real is as good as anyone’s guess.

However, the pertinent question we should be asking is whether schemes like New Singapore Shares and Progress Package will necessarily gain support for the government?

There have been calls for the government from certain quarters to pay more attention to the people’s welfare. Assuming that its fiscal management methods is sound and it always has budget surpluses, wouldn’t an investment into the people’s welfare or even economic development initiatives be a more worthwhile expenditure rather than re-distributing the money during an ostensibly close date to the elections?

The Progress Package involved a re-distribution of up to $2.6 billion prior to the 2006 General Elections. $1.3 billion can possibly be set aside for instance in an entrepreneurship start-up fund to sponser budding entrepreneurs and other small medium enterprises. This in turn will create jobs and raise the employment rate. The rest can be invested in welfare programs, for instance, $400 million for a Jobseeker fund to give aspiring jobseekers a sustainable stipend as they attempt to land a job, another $400 million that will go to a school children fund to help schooling children with their expenses and another $500 million that will go into an elderly fund that will subsidize the needs of our elderly.

Sometimes, there are many who mistakenly think that the re-distribution of a certain amount to all and sundry within a country can easily win over support to the government. However, that is not so true. Rather, the ability to use that certain amount to stimulate the economy and invest in welfare programs is a much more effective approach of governance capable of winning widespread support.

Hence, there should be a paradigm shift of our government’s thinking from ‘re-distributing excesses’ to using the excesses to stimulate our economy and invest in welfare programs. At the end of the day, it will be win-win situation for the government and the people alike. Thus, to answer the opening question..NO, electoral handouts is not the best option when so much more can be done.